NiceShoes retail store sells one model of casual shoes all around the year. The demand for this model has an approximate constant rate of 750 pairs every three months. The store incurs an ordering cost of $ 75 and a holding cost of 20%. The supplier offers NiceShoes the following price structure. Which order quantity results in the lowest cost? Quantity 1-249 250-349 350-499 ≥500 Price $40 $38 $36 $34 3.1. Which order quantity results in the lowest cost?
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- company sells 20,000 radios evenly throughout the year. The cost of carrying one unit of inventory for one year is P8, and thepurchase order cost per order is P32. What is the economic orderquantityThe purchasing agent for a company that assembles and sells air-conditioning equipment in a Latin American country noted that the cost of compressors has increased significantly each time they have been reordered. The company uses an EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?Daily demand for product sample kits is normally distributed with a mean of 35 units and a standard deviation of 4. Supply is virtually certain with a lead time of 9 days. The cost of placing an order is $20, and annual carrying costs for one kit is 25 percent. The price of one kit is $12.50. Assume a year has 365 days.If a 99% service level is desired, what is average inventory on hand? If demand had no variation, what would the reorder point be?
- Demand for a product is relatively constant at 5 units per day. Lead time for this product is normally distributed with a mean of 20 days and a standard deviation of 4 days. (a) What reorder point provides an 80 percent service level? (b) What reorder point provides a 90 percent service level? (c) If the lead time standard deviation can be reduced from 4 days to 1, what reorder point now provides 90 percent service? How much is safety stock reduced by this change?Demand during lead time for one brand of TV is normallydistributed with a mean of 36 TVs and a standard deviationof 15 TYs. What safety stock should be carried for DennisYu's Appliance Outlet to provide a 90% service level? What is theappropriate reorder point?ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also anopportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450.If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory.(B) Economic Order Quantity9. What would the average number of boxes be if the economic order quantity was used (excluding safety stock)?Round off to two decimal places.10. How much would the carrying cost for the year if the economic order quantity was followed (excluding safetystock)?11. How much would the total inventory related (ordering plus carrying)…
- Charlie’s Pizza orders all of it pepperoni, olives, anchovies, and mozzarella cheese to be shipped directly from Italy. An American distributor stops by every seven weeks to take orders. Because the orders are shipped directly from Ital, they take six weeks to arrive. Charlies Pizza uses an average of 250 pounds of pepperoni each week, with a standard deviation of 18 pounds. Charlie prides itself on offering only the best –quality ingredients and a high level of service, so it wants to ensure a 95 percent probability of not stocking out on pepperoni. Assume that the sales representative just walked in the door and there are currently 470 pounds of pepperoni in the walk-in cooler. How many pounds of pepperoni would you order? (Use the excels NORMSINV( ) function to find the critical value for the given a-level, (Round you z-value to 2 decimal places and final answer tOretailer of white goods buys small appliances from a supplier. Their line includes rwo types of appliances for which the related data are as follows: Appliance type 2. Annual demand (units) 5235 4850 Ordering cost (TL) 125 125 Enit purchasing cost (TL) 35 25 The retailer has allocated a budget of 22,000 TL for thas procurement Assume that the aunual inventory carrying cost rate is 20 percent Caleulnte the unconstramed order quantities Are these values optimal? If not detemine the optimal quantities to be purchased from each appliance type (Hat. 0056)B). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 What ordering-quantity policy do you recommend?
- ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450.If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory. (C) Reorder Point and Economic Order Quantity19. What would the average number of boxes be if the safety stock from Part A was kept and the EOQ from Part Bwas followed? Round off to two decimal places.20. How much would the carrying cost for the year be based on item 19?21. How much would the total inventory related (ordering plus carrying) costs be if the…ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-days-worth of inventory. (A) Reorder Point1. What should be the reorder point in boxes?2. How much would the normal lead time usage be?3. How much should ABC keep as safety stock?(B) Economic Order Quantity4. What is the annual demand for the boxes of candles?5. How much is the carrying cost of one box of candles for one year?6. What is the economic order quantity for the boxes of…ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory. (A) Reorder Point 1. What should be the reorder point in boxes? 2. How much would the normal lead time usage be? 3. How much should ABC keep as safety stock? (B) Economic Order Quantity 4. What is the annual demand for the boxes of candles? 5. How much is the carrying cost of one box of candles for one year? 6. What is the economic order quantity for the…